Upcoming Medi-Cal Rx Transition

May 29, 2020

In April 2020, the Department of Health Care Services (DHCS) published the first in a series of articles regarding the Medi-Cal Rx program. The intent of these articles is to ensure Medi-Cal providers, and other interested parties, are better informed as to the upcoming Medi-Cal Rx transition.

Effective January 1, 2021, DHCS will transition all administrative services related to Medi-Cal pharmacy benefits billed on pharmacy claims from the existing Medi-Cal Fee-for-Service (FFS) Fiscal Intermediary (FI) or the member’s Managed Care Plan (MCP) to DHCS’ new Medi-Cal Rx vendor/FI, Magellan Medicaid Administration, Inc. (Magellan). For claims administration, the chart below represents claims processing and adjudication responsibilities pre- and post-transition.

Delivery System Claim Type (Pharmacy vs. Medical/Institutional) Adjudication Responsibility
Pre-Transition Post-Transition
MCP Delivery System Pharmacy services billed on a medical/institutional claim MCPs MCPs
Pharmacy services billed on a pharmacy claim MCPs Medi-Cal Rx
FFS Delivery System Pharmacy services billed on a medical/institutional claim FFS FI FFS FI
Pharmacy services billed on a pharmacy claim FFS FI Medi-Cal Rx

DHCS is committed to ensuring a successful transition from the current FFS FI or the MCP to Magellan without disruptions to state programs, providers and/or beneficiaries. Accordingly, as part of DHCS’ commitment to keeping the Medi-Cal providers and broader stakeholder community informed throughout this transition process, DHCS has created a dedicated Medi-Cal Rx website and released a Frequently Asked Questions (FAQ) document.

What’s Next?

In the coming months, the new Medi-Cal Rx website will be launched by DHCS – in partnership with Magellan. Providers, beneficiaries and other stakeholders will have access to a growing repository of transition resources and program information. In general, all pharmacy services billed as a pharmacy claim, including outpatient drugs (prescription and over the counter), Physician Administered Drugs (PADs), Medical Supplies and Enteral Nutritional Products (and their electronic equivalents) are in scope for Medi-Cal Rx. Only pharmacy services billed as a medical (professional) or institutional claim (or their electronic equivalents) are not in scope. The chart below provides a more detailed view as to what is and is not changing as of January 1, 2021.

What’s Changing

Medi-Cal pharmacy benefits, for individuals in both FFS and MC delivery systems, will be managed by the Medi-Cal Rx vendor, Magellan, for the following:

  • Claims administration, processing, and payment
  • Coordination of benefits with other health coverage, including Medicare
  • Utilization management (UM), including ensuring all prior authorization requests’ (PA) adjudication
  • Prospective and Retrospective Drug Utilization Review

  • Drug rebate administration services, which are compliant with federal and state laws, and adhere to DHCS policies and direction
  • Beneficiary and provider support related to pharmacy benefits billed on a pharmacy claim, including all provider and beneficiary calls, as well as outreach, training, and informing materials
  • Provision of real-time data access for Medi-Cal providers and daily data feeds for the purposes of coordinating care to Medi-Cal plan partners

  • Provision of direct plan partner liaisons to assist with care coordination and clinical issues

What’s Not Changing
  • Pharmacy services as part of a bundled/all-inclusive billing structure in an inpatient or long-term care setting, regardless of delivery system
  • Existing Medi-Cal managed care pharmacy carve-outs (e.g., blood factor, HIV/AIDS drugs, antipsychotics, or drugs used to treat substance use disorder). Today, these are carved out from most Medi-Cal managed care plans (MCPs) and, as of January 1, 2021, will be carved out of all MCPs
  • The State Fair Hearing process administrated by the California Department of Social Services for Medi-Cal beneficiary appeals

Medi-Cal Rx Transition Strategies and Approaches

With the transition to Medi-Cal Rx, Medi-Cal beneficiaries should not experience a significant difference in how they receive Medi-Cal pharmacy benefits. DHCS, in partnership with Magellan and other contracted partners, are working diligently to ensure DHCS providers and Medi-Cal beneficiaries have access to appropriate and robust customer service supports to ensure continued access to medically necessary care leading up to, during and after the transition. To this end, DHCS will also appropriately notice beneficiaries and provide helpful resources and tools to help navigate Medi-Cal Rx.

To assist Medi-Cal Rx beneficiaries, pharmacies, and providers with the initial transition, DHCS has created a multi-faceted pharmacy transition policy inclusive of “grandfathering” previously approved (PAs from managed care and fee-for-service, as well as a 120-day period with no PA requirements for existing prescriptions, to help support the Medi-Cal Rx transition. During this transition period, Magellan will provide system messaging, reporting and outreach to provide for a smooth transition to Medi-Cal Rx. Operational details relative to the policy and process will be sent to Medi-Cal MCPs, pharmacies, and providers in the coming months.

The purpose of this pharmacy transition policy is to:

  • Ensure Medi-Cal Rx beneficiaries with existing prescriptions, with or without previously approved prior authorization (PAs), will have continued coverage through “grandfathering,” except where patient safety concerns exist.
  • Allow beneficiaries to have enough time during this one-time transition period to work with their doctors to either submit a PA based on medical necessity, or switch to a preferred Medi-Cal Rx covered drug.
  • Educate pharmacy providers, physician prescribers, and others to become familiar with medications that do not require PA.


For additional and ongoing updates regarding this transition, please visit the DHCS Med-Cal Rx website. For general questions relating to Medi-Cal Rx, please direct your comments and questions to RxCarveOut@dhcs.ca.gov.